This issue of DACnews looks at several areas in which the DAC is moving
beyond aid to deliver more comprehensive impact on development. From
domestic resource mobilisation to sustainable reconstruction, from climate
change preparedness to building national statistical capabilities, the many
facets of development require action – and policies – that span numerous and
diverse concerns.

We will be working with the donor
community to promote efficient and principled humanitarian assistance, both
in the short-term relief effort and in the longer-term challenge of
reconstruction and development. - OECD Secretary-General Angel Gurrìa

In 2006, Haiti turned a corner in terms of security and elections, and
we began to see a progressive increase in foreign direct investment. Yet
despite this, Haiti remained the poorest country in the Western hemisphere,
with 72% of the population surviving on less than two dollars a day.

Today, in the aftermath of the devastating earthquake, the fragility of the
country’s institutions, networks and coping mechanisms has been exposed and
exacerbated.

The OECD is committed to supporting the international effort to “build back
better” – a term coined in the wake of the Asian tsunami – in Haiti. This
will hinge on co-ordinated short- and long-term recovery efforts that address
the country’s multiple challenges: heavily affected infrastructure, food
insecurity, youth unemployment, socio-economic imbalances, environmental
degradation and vulnerability to hurricanes and storms. Haiti needs durable
infrastructure and early warning/early response systems that can withstand
the hostile forces of nature, as well as long-term economic development
planning and statebuilding – which is essential to building resilience.

Steady support from the international community over the next decade will be
fundamental. At the same time, Haiti must hold stewardship of the
reconstruction effort. This means that robust plans to “get the job done”
will need to be developed, but this will need to be done with an eye to
fostering capacity development and national accountability. The experience
in the Indonesian province of Aceh, which was affected both by conflict and
the tsunami, shows that this is possible.

The OECD will support monitoring and reconstruction efforts by tracking DAC
members’ aid commitments to Haiti as well as their subsequent disbursements.
The OECD will also advise, in the short run, on service delivery – matching
needs with services offered by private and NGO providers – and over the long
term, on capacity building.

The OECD is joining forces with the main donors in Haiti and the UN Office
of the Special Envoy for Haiti in advance of the donor conference scheduled
on 15 April 2010 in New York. On 24-26 February 2010, the OECD International
Network on Conflict and Fragility directors’ meeting (Washington, D.C.) will
focus on donor challenges in Haiti, and on 24-26 March, the OECD High Level
Event on South-South Co-operation and Capacity Development (Bogotá) will
receive a progress update on Haiti from the Organisation of American States.

In the wake of the Copenhagen UN Climate Change Conference 2009 (COP15), DAC
members approved a means of tracking official development assistance (ODA)
in support of climate change adaptation. DAC members have begun to assess
their aid activities against this new “policy
marker” as of 1 January 2010, identifying aid projects that have climate
change adaptation as their main or significant objective.

Adaptation-related aid aims to reduce the vulnerability of human or natural
systems to climate change and climate-related risks by maintaining or
increasing adaptive capacity and resilience. It encompasses a range of
activities –
from information and knowledge generation to capacity
development, planning, and the implementation of actions to promote climate
change adaptation.

This new marker complements the already existing “Rio
marker” on climate change mitigation. An
analysis of OECD
data for 2007 shows that based on the “Rio marker”, DAC members provided
USD 3.8 billion in bilateral ODA to help developing countries reduce
greenhouse gas in the energy, transport, water and forestry sectors. This
represents about 4% of total bilateral ODA that year. The largest donors
were Japan (USD 1.3 billion), Germany (USD 0.8 billion) and France (USD 0.5
billion).

To ensure that they have the data they
need to support their policy decisions, countries – especially developing
countries – need strong statistical systems. In the words of the Millennium
Declaration, statistics help make “globalisation a positive force for all
the world’s people.”

For ten years, the Partnership in Statistics for Development in the 21st
Century – or PARIS21 – has supported the compilation, publication and use of
statistics in developing countries. PARIS21 celebrated its tenth
anniversary in Dakar, Senegal, with the endorsement of the Dakar Declaration
on the Development of Statistics (DDDS). The unanimous decision to support
this declaration was made during a conference that took place under the
theme “Statistics for development – renewing the partnership”, co-organised
with the Government of Senegal (16-18 November 2009).

Over 440 participants from 100 countries
attended the conference, which was opened by the President of Senegal, his
Excellency Maître Abdoulaye Wade. The event also marked the beginning of a
new mandate and strategy for PARIS21 into 2014.

All meeting documents, including the full
text of the declaration in several languages, are available on the dedicated
Consortium PARIS21 website.

The theme of taxation – and its role in development – was
on the table at the recent
Global Forum on Development (28 January, OECD headquarters). Just prior
to this meeting, experts from two of the OECD’s major committees – the
Committee on Fiscal Affairs and the Development Assistance Committee – held
their first-ever joint meeting to agree on how tax specialists and
development experts can work together to help developing countries.

In her presentation to that gathering, Ingrid Fiskaa, the Norwegian State
Secretary for International Development, added further momentum to the
OECD’s work on tax and development.

The development community has been focusing on aid – and on how to
improve aid delivery – rather than concentrating on how to use aid
strategically in order to influence the larger capital flows that determine
social and economic development. In much the same way, the international tax
policy community has been focusing on regulations and standards – and how to
improve them – rather than looking squarely at how standards and regulations
are being implemented, applied and adhered to.

This is not to say that there are not positive developments. We can cite the
work to promote the implementation of the
Tax Information Exchange Agreements– a vital first step in helping tax
administrations know which individuals and companies are paying tax and
where. We hope that the OECD and the global community will continue to work
towards automatic exchange of information, with fewer restrictions on access
to information.

The agreement to initiate a process by countries of peer reviewing each
other’s progress on tax transparency – made last year just after the
successful
Global Forum on Transparency and Exchange of Information in Mexico –
will be important in helping all of us to scrutinise compliance and
adherence to agreed standards. The reports from these reviews should be made
public to contribute to political pressure.

From a development perspective, these are all necessary and relevant
measures and processes. Nonetheless, they are still insufficient. We need to
make sure that developing countries build the necessary capacity to take
full advantage of international transparency efforts. But we also need to
actively include developing countries and their interests in international
tax co-operation and the development of regulatory frameworks. We must
ensure equal access for developing countries to the mechanisms and practical
processes necessary for implementation!

Studies indicate that illicit capital flows out of developing countries
could be as high as USD 1 billion, or about ten times all global official
development assistance coming in to developing countries. As a politician
responsible for development issues, I cannot ignore such numbers – even
though they are rough estimates. We cannot focus only on the expenditure
side of development; we cannot focus on aid alone. We need to address the
income side of the equation as well. Economic growth – and increased tax
revenues – are central to sustainable economic and social development in
poor countries.

Norway is very pleased with the increased global focus on international tax
issues and illicit financial flows in the G20, the UN, the World Bank and
the IMF; in the EU and in countries like Germany, France, Spain and the USA;
and in the OECD. The focus of developed countries, however, tends to be on
tax evasion and loss of developed countries’ own tax revenue, and not on the
devastating effects of illicit capital flows for developing countries. That
is why we particularly welcome the intention of the OECD to become a driving
force in addressing the development dimension of illicit capital flows.

It is important that we back initiatives to combat illicit capital flows,
corruption and money laundering, and that we work to curb the harmful
effects of tax havens on developing countries. But it is also important that
developing countries take primary responsibility for their own development
by putting in place appropriate policies and measures to mobilise domestic
financial resources for development.

Accountability and transparency of revenue streams are vital to effective
public oversight, but not sufficient to guarantee social and economic
development. Strong, accountable and democratic institutions will deter
mismanagement and corruption, and wisely managed resources will generate
revenues that also need to be wisely spent in order for a country or society
to prosper.

We need to help strengthen developing countries’ capacity to manage their
own natural resources. Natural resources should be a blessing, not a curse.
Revenues from natural resources should be used to provide essential services
for the many and not be allowed to disappear into the pockets of the few.
Local communities should experience new economic opportunities. Countries
rich in natural resources should prosper and not slide into violent conflict
and political chaos. Sustainable natural resource management – and taxation
of such resources – is essential in this respect.

We are also very enthusiastic about the ambition of the OECD to strengthen
its development perspective on important matters like transfer pricing and
country-by-country reporting, which have the potential to reduce tax
avoidance and evasion by large multinational enterprises operating in
developing countries. Finally, we welcome the OECD-led discussion on
taxation of aid-funded goods and services. This is a long-overdue debate
concerning our own practices.

In conclusion, bringing the tax and development policy areas together in an
OECD tax and
development programme could be an important contribution to raising tax
revenues in developing countries, but also to strengthening the relevance of
the OECD as an organisation by firmly acknowledging that tax policy is more
than a technical or judicial exercise; International tax policy is also
development policy.

On 24-26
March 2010, Colombian President Álvaro Uribe Vélez is set to open a
high-level meeting of ministers and technical experts that zooms in on aid
effectiveness principles through the lens of the OECD DAC’s Southern
partners. Held in Bogotá, Colombia, the meeting will look at
65 case reports
from Asia, Latin America and Africa with the aim of culminating in a “Bogotá
Statement”.

Strengthening country systems for environmental management
In light of recent Copenhagen Accord commitments to provide nearly USD 30
billion in Fast Start Climate Change Financing by 2012, the importance of
sound country systems to manage this financing is paramount.

Strengthening country systems for environmental management – and in
particular integrating environment into planning and public financial
management – is the central theme of a Poverty Environment Partnership
meeting in Lilongwe, Malawi, on 4 March 2010. There will be a special
session on climate change financing and aid effectiveness at the meeting.

Aid to health in developing countries rises fourfoldSince 1990, aid to health in developing countries has seen a
dramatic increase: from USD 5 billion to USD 21.8 billion in 2007. By 2008,
this had contributed to a 28% reduction in the child mortality rate in
developing countries and access to anti-retroviral treatment for more than 3
million people.

Patterns in aid for health are changing: new actors like the Global
Fund to Fight Aids, Tuberculosis and Malaria, and the GAVI Alliance have
risen from less than 1% of health assistance in 2002 to 8% and 4.2% in 2007.
The Gates Foundation alone accounted for 3.9% of health assistance in 2007.

Not all developments are positive, however: maternal mortality rates
remain stubbornly high in many developing countries. To quote a November
OECD

Italy:Italian development co-operation faces two main
challenges: the first is an urgent need to reform official development
co-operation; the second the growing threat of not meeting its international
commitment to increase official development assistance from 0.22% in 2008 to 0.51% of its gross
national income (GNI) by 2010, and to 0.7% by 2015. The peer review commends
Italy for its 2008 improvements – such as placing priority on 35 countries,
and delegating greater authorities to embassies and technical offices to
facilitate aid delivery.

Switzerland:
Switzerland’s official aid amounted to USD 2.02 billion in 2008 (2.19
billion CHF), an increase of over 6% compared to 2007. The peer review
recommends that Switzerland adopt a 0.5% target for ODA/GNI. While welcoming
Switzerland’s focus on the poorest countries and its thinking on governance
and fragile situations, the peer review calls for enhancing cohesion between
the two ministries entrusted with development co-operation, and ensuring
that all policies are coherent with Switzerland’s development aims.

Civil Society and Aid Effectiveness: Findings, Recommendations and Good
Practice
Better aid requires a broader understanding of the aid effectiveness agenda
and a place for civil society organisations (CSOs) as development actors in
their own right and as aid donors, recipients and partners. This book is a
resource for implementing the Accra Agenda for Action’s recommendations on
civil society and aid effectiveness, addressing developing country
governments, donors, and CSOs from developing and developed countries.

Aid Activities in Support of Agriculture
Unique and comparable data consistent with definitions and methodologies of
DAC statistics cover aid flows to agriculture from 2002-2007. This
publication covers trends in donors’ aid and geographical focus of flows,
and paints a broader picture of donors’ short- and long-term measures to
address food security challenges.

Do No Harm: International Support for Statebuilding
This publication presents a set of recommendations on how donor countries
can avoid the risks of undermining positive statebuilding measures, based on
comparative case studies of Afghanistan, Bolivia, Democratic Republic of
Congo, Nepal, Rwanda, and Sierra Leone.

Other products:

Making reform happen in environmental policy: drawing on a
number of case studies from different OECD countries, this study analyses
the political economy of environmental policy reform, concentrating on how
political and institutional factors influence reform design,
decision-making, adoption and implementation.

Untying aid:
is it working? A first-ever independent evaluation of DAC members
policies and practices towards untying aid finds positive developments, and
encourages continued progress through genuine partnerships between donors
and aid recipients.

China-DAC Study Group: an
introduction
and concept note
look into sharing experiences and promoting learning about growth and
poverty reduction in China and African countries.

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